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STAMFORD, Conn., November 25, 2014 View All Press Releases

Gartner Survey Reveals That SaaS Deployments Are Now Mission Critical

Survey Reveals Enterprise Cloud Adoption Plans Through 2017

Analysts Explore Cloud Strategies at the Gartner Data Center, Infrastructure & Operations Management Conferences 2014, November 24-25 in London and December 2-5 in Las Vegas

Global buyers of cloud applications cite cost, innovation and agility as reasons for adoption, according to a recent survey by Gartner, Inc. In May and June 2014, Gartner conducted a survey across 10 countries in four regions to examine organizations' adoption and deployment of cloud services across SaaS, infrastructure as a service (IaaS) and platform as a service (PaaS). The countries included within the 2014 survey were the U.S., Brazil, Mexico, the U.K., Germany, France, China, India, South Korea and Australia. 

"The most commonly cited reasons the survey found for deploying SaaS were for development and testing production/mission-critical workloads," said Joanne Correia, research vice president at Gartner. "We've seen a real transition from use cases in previous surveys where early SaaS adoption focused on smaller pilot projects. Today, the projects are mission-critical and production grade. This is an affirmation that more businesses are comfortable with cloud deployments beyond the front office running sales force automation (SFA) and email." 

Forty-four percent of survey respondents said that overall cost reduction continues to dominate as the main reason for investment. However, when the data is organized by role, the cloud adoption survey indicates that "cost reduction" rated highest for the more junior IT roles (IT staff and IT managers). Senior business executives (excluding CIOs) also rated "cost reduction" as a key benefit, but not at the same rate as the IT staff. The CIO and IT director roles all rated "cloud is a modern approach," "innovation" and "operational agility" as top drivers. The senior IT leaders also rated "business advantage" significantly higher than junior IT roles. 

The conclusion is that CIOs are focused on using the cloud to establish a modern, innovative IT environment with operational agility and business advantage as key outcomes whereas business leaders (non-IT) still see the cloud as a means to save costs and may not yet have full appreciation for the business benefits or strategic opportunity of using cloud services. 

Regardless of the reason of implementing cloud, Gartner advises that public cloud is not always the most appropriate model for all use cases within companies. The decision to deploy SaaS-based applications within an enterprise depends on the business-criticality of the solution, as well as the organization's geography, business agility, usage scenario and IT architecture. Therefore, few organizations will completely migrate to SaaS and will live with a mix of SaaS and traditional on-premises application deployment models, with a focus on integration and migration between different deployment models. 

The survey found that security, privacy and fear of government snooping remain leading concerns for respondents (especially outside of the U.S.) that do not consider public cloud-based models. Although protection methods are continually upgraded and providers' position public cloud services as secure, concerns remain. 

"Data loss, data breaches, unsecure application programming interfaces (APIs) and shared technology in a multitenant environment are just a few of the concerns expressed by respondents tackling the option of using public cloud," said Laurie Wurster, research director at Gartner. "In addition, recent concerns of government snooping in the name of anti-terrorism and general privacy issues contribute to the lack of public cloud adoption." 

In reaction to these concerns, respondents will push the adoption growth of private (a combination of internal or as hosted private cloud managed by a third party) cloud (46 percent) for deployment across all software markets by nearly twice the rate of public cloud (24 percent) adoption over the next two years. The trend indicated by respondents' cloud adoption behavior for software deployment suggests the majority of data centers are moving to private cloud deployment for implementation of new software. The traditional deployment model for on-premises software is expected to significantly shrink from 34 percent today to 18 percent by 2017. Legacy software will remain on-premises in the traditional model until end of life unless updates and upgrades allow for private cloud deployment models. 

Despite security and privacy concerns, survey respondents continue to invest in public cloud for SaaS deployment of software applications. Key drivers for SaaS include the fact that "hands off" IT enables redirection of limited in-house staff to other responsibilities since the SaaS provider is responsible for ongoing support. Rapid deployment and faster access to innovation are also important since SaaS vendors are able to roll out applications when you are ready and lower upfront costs with a pay-as-you-go pricing model. 

"Although fewer respondents indicated investment in public cloud for platform as a service, business process as a service (BPaaS) and infrastructure as a service, the results are still significant in response to these emerging technologies. Cloud-hosted applications continue to grow as alternatives to internally managed systems; they will generate increasing demand for SaaS extension and integration — both functions of PaaS offerings," said Fabrizio Biscotti, research director at Gartner. "Although SaaS and IaaS are fairly consolidated, PaaS is still open for expansion, with both SaaS and IaaS providers looking at PaaS as a natural extension for growth. Of all the cloud technological aspects for which respondents indicated investments, BPaaS, IaaS and SaaS are the most mature and established from a cloud landscape perspective, while PaaS is the least evolved." 

More detailed analysis is available in the report "Survey Analysis: Buyers Reveal Cloud Application Adoption Plans Through 2017." The report is available on Gartner's website at http://www.gartner.com/document/2883318

Gartner analysts are examining the cloud market at the Gartner Data Center, Infrastructure & Operations Management Summit 2014, being held on November 24-25 in London, and the Gartner Data Center, Infrastructure & Operations Management Conference 2014, held in Las Vegas on December 2-5. For further information about the Summit in London, please visit http://www.gartner.com/eu/datacenter. More information on the Las Vegas event is available at http://www.gartner.com/technology/summits/na/data-center/.

Information from the Gartner Data Center, Infrastructure & Operations Management Summit 2014 events will also be shared on Twitter at http://twitter.com/Gartner_inc using #GartnerDC. Members of the media can register for the London event by contacting rob.vandermeulen@gartner.com or the Las Vegas event by contacting janess.rivera@gartner.com

About the Gartner Data Center, Infrastructure & Operations Management Summit 2014

At the Summit, Gartner analysts will explain how IT leaders must act quickly to take charge and lead data center transformation — or risk being left behind. The Summit will provide actionable strategies to help decision-makers balance the need to deliver reliable IT services with the need to drive digital innovation in their businesses.

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